Monday, April 20, 2015

Compliance, Compliance, Compliance (a CCRC gets trapped by Medicare Rules)

Whenever I look at national programs on "hot topics" in healthcare law, I'm seriously impressed by the number of offerings on regulatory compliance issues connected to Medicare and Medicaid payments. There are abundant reasons for this emphasis. Each year the Department of Justice touts its statistics on "recoveries" for False Claim Act cases.  For the fiscal year ending September 30, 2014, the DOJ enthusiastically reported its "first annual recovery to exceed $5 billion" in a single year.  No wonder health care law is a hot field.  And remember, much of the money is connected to senior care in all of its guises. 

A recent $1.3 million settlement on a Medicare-related False Claims Act case might seem like small potatoes at first glance.  But, I was struck by the fact that it was a DOJ settlement with a (non-profit) Continuing Care Retirement Community.  I don't usually think of CCRCs as being a major target of False Claim Act allegations.  Details are a bit sparse, but the size of the payment seemed pretty hefty when you consider that Asbury Health Center near Pittsburgh, PA actually "self-disclosed" its violation of Medicare regulations.  The DOJ press release on April 15 explains:

"For post-hospital skilled nursing care, Medicare regulations require that a facility obtain a physician certification at the time of admission or as soon thereafter as reasonable and practical. The facility must also obtain a physician recertification within 14 days of admission and every 30 days thereafter. Based on information provided by Asbury, the United States alleged that it had civil claims against Asbury resulting from Medicare payments for post-hospital skilled nursing services that were not supported by physician certifications and recertifications."

Law 360 reports the explanation of Asbury's Chief of Staff about the settlement here.

April 20, 2015 in Current Affairs, Ethical Issues, Federal Cases, Federal Statutes/Regulations, Health Care/Long Term Care, Medicaid, Medicare | Permalink | Comments (0) | TrackBack (0)

Friday, April 10, 2015

Third Circuit Affirms Geriatrician's Conviction for Violation of Anti-Kickback Law

ElderLawGuy Jeff Marshall alerted us to this week's ruling by the Third Circuit Court of Appeals, affirming the conviction of Eugene Goldman, M.D. for several counts of taking "kickbacks" for referral of Medicare and Medicaid patients for hospice services.  Dr. Goldman's sentence of 51 months, followed by three years of supervised release during which he is barred from practicing medicine, was affirmed.  The facts, as set forth in the opinion, are interesting:

"Goldman had a geriatric medicine practice in Northeast Philadelphia. In December 2000, he secured the position of Medical Director of Home Care Hospice ('HCH'). Alex Pugman served as Director of HCH, and his wife, Svetlana Ganetsky, was the Development Executive, responsible for marketing HCH to doctors and other healthcare professionals. According to his contract, Goldman was responsible for quality assurance, consultations, and the occasional meeting. In reality, his job was to refer patients to HCH.

 

Goldman was paid for the number of patients he referred to HCH and the length of their stay. Early in his relationship with HCH, Goldman was paid $200 per referral. By 2011, he received $400 per referral, with an additional $150 for each patient who stayed longer than a month. Ganetsky paid Goldman each month by check. Between 2002 and 2012, Goldman referred more than 400 Medicare patients to HCH and received approximately $310,000 in return.

 

In 2006 the FBI and Department of Health & Human Services began investigating HCH for Medicare fraud. The FBI followed up in 2008 by obtaining a search warrant and seizing over 500 boxes of documents and information from HCH’s servers. Shortly after the raid, Ganetsky and Pugman approached the FBI and agreed to cooperate in the investigation. Ganetsky then recorded several meetings at which she paid Goldman for his referrals. Ganetsky made these payments with funds drawn from an account opened by the FBI for the investigation."

Continue reading

April 10, 2015 in Crimes, Ethical Issues, Federal Cases, Federal Statutes/Regulations, Health Care/Long Term Care, Medicaid, Medicare | Permalink | Comments (0) | TrackBack (0)

Tuesday, April 7, 2015

Health Care Reform, Transition & Transformation in LTC

Tuesday, March 31, 2015

Massachusetts Federal Court Calls for Clearer Rules to Permit Sound Planning for Special Needs

In DeCambre v. Brookline Housing Authority, decided by a federal district court in Massachusetts on March 25, the issue was whether a disabled adult living in Section 8 housing becomes ineligible for the housing subsidy because of disbursements to her from a special needs trust, funded as the result of a personal injury settlement. 

Although the court affirmed the Bureau of Hearings and Appeal ruling on her income and expenses, thus disqualifying her for public housing benefits, the court also called for clearer federal guidelines to permit better planning for needy beneficiaries: 

"[This case demonstrates the serious problem that beneficiaries of irrevocable trusts face; in particular, those that seek to pour lump-sum settlement funds into irrevocable trusts. But until the rules and regulations are clarified, public housing authorities should provide clear guidance and instruction for potential tenants with regard to their financial planning and spending. A more thorough and thoughtful analysis is required by public housing authorities when determining Section 8 eligibility, until further guidance is provided by the HUD."

March 31, 2015 in Discrimination, Estates and Trusts, Ethical Issues, Federal Cases, Federal Statutes/Regulations, Housing | Permalink | Comments (0) | TrackBack (0)

Tuesday, March 10, 2015

8th Circuit Rejects "Attempt" to Create d4A Special Needs Trust to Permit SSI Eligibility

In Draper v. Colvin, petitioner sought judicial review of SSA's denial of her application for SSI benefits. Her claim was sympathetic, as "[e]ighteen-year-old Stephany Draper suffered a traumatic brain injury in a car accident in June 2006."

In an admittedly  "hard line" ruling on March 3, the 8th Circuit rejected her argument that her parents' intent to establish a valid third-party-settled special needs trust, using proceeds from a settlement of a personal injury suit on her behalf, should permit her to claim SSI. 

The ruling means that over $400,000 will be treated as "available resources," thus requiring spend down before she would be eligible for benefits.  The court explained (minus citations):

Admittedly, some evidence in the record supports Draper's claim that her parents intended to act in their individual capacities. Draper's parents identified themselves individually as settlors and trustees, and the trust document explicitly states that it was established “pursuant to 42 U.S.C. § 1396p(d)(4)(A)," a provision which notes that a third party, such as a parent, must create the special needs trust for the benefit of the disabled person. Nevertheless, as discussed [earlier in the opinion], other facts provide substantial evidence to support the conclusion that Draper's parents acted using the power of attorney when establishing the trust.

The Court continued on to its tough bottom line:

Continue reading

March 10, 2015 in Cognitive Impairment, Estates and Trusts, Federal Cases, Federal Statutes/Regulations, Health Care/Long Term Care, Medicaid, Property Management, Social Security, State Statutes/Regulations | Permalink | Comments (0) | TrackBack (0)

Monday, March 9, 2015

"The Originalist" Puts Justice Antonin Scalia on Center Stage

 

The Originalist On Sunday I had the interesting opportunity to be in the audience for the third performance of a new play, The Originalist, at Arena Stage in Washington D.C.  Playwright John Strand has given Justice Antonin Scalia center stage and the spotlight for close to two hours, in a play filled with opera, literary references, plenty of legal humor, a few card games, and lots of verbal boxing between the justice and his young, liberal "contra" clerk. 

The play makes deft use of Scalia's own words, drawn from opinions and public presentations, and actor Edward Gero wears the robes -- and wields Scalia's weapons -- with authority. Kerry Warren, holds her ground well, both as actress and antagonist in the role of the law clerk.  The play concludes in the recent past, as Justice Scalia debates with the clerk the words he will announce from the bench for his dissent on the Defense of Marriage Act (DOMA) case, United States v. Windsor

The play succeeds especially well in an important goal of the playwright, as identified in a lively post-production Q & A session with the audience. The play encourages serious discussion of what it means to "interpret" the Constitution. Through the voice of the clerk, it also asks whether there is any room for true solutions to emerge in the polarized world of left-right politics. 

The Originalist also proved to be surprisingly relevant to themes in this Blog. Scalia is depicted as the aging lion in winter, given to occasional moments of introspection and an intriguing episode of pique (hint: what career aspiration may he have pondered?). At one point he is seen as attempting to justify his intransigence with the observation that he's growing old, a condition for which there is "no cure."

The play -- set in the intimate black box space of the Arlene and Robert Kogod Cradle -- is scheduled to run until April 26. 

March 9, 2015 in Current Affairs, Discrimination, Ethical Issues, Federal Cases | Permalink | Comments (0) | TrackBack (0)

Tuesday, February 24, 2015

Home Care Workers Join Forces to Advocate for Fair Wages

USA Today reports on home care workers "joining a nationwide movement" to raise wages,  with rallies planned for "more than 20 cities in the next two weeks." 

As described by journalist Paul Davidson,

"Like the fast food workers, the 2 million personal care and home health aides seek a $15 hourly wage and the right to unionize, which is barred in some states. Their median hourly wage is about $9.60 and annual pay averages just $18,600 because many work part-time, according to the Labor Department and National Employment Law Project. That puts the industry among the lowest paying despite fast-growing demand for home-based caregivers to serve aging  Baby Boomers over the next decade.

 

'Home care providers living in poverty don't have a stable standard of living so they can provide quality care,' says Mary Kay Henry, president of the Service Employees International Union, which is spearheading the home care aides' movement and backed the fast-food worker strikes."

According to a representative of "Home Care Association of America, which represented agencies that employ personal-care aides," companies attempt to "balance the ability to keep care affordable with attracting employees."

Thanks to Dickinson Law 3L student Jake Sternberger for pointing me to this news item.

February 24, 2015 in Consumer Information, Discrimination, Ethical Issues, Federal Cases, Federal Statutes/Regulations, Health Care/Long Term Care, State Cases, State Statutes/Regulations, Statistics | Permalink | Comments (0) | TrackBack (0)

National Consumer Law Center Webinar on Medical Debt & Collection Practices

The National Consumer Law Center (NCLC) is offering a free webinar on "Medical Debt: Overview of New IRS Regulations and Industry Best Practices" on March 4, 2015 from 2 to 3 p.m. Eastern Time.

The hosts describe the webinar as follows:

This webinar will present an overview of the IRS final regulations governing financial assistance and collection policies of nonprofit hospitals. The regulations require nonprofit hospitals to have written financial assistance policies; regulate debt collection by nonprofit hospitals and third party
agencies; and prohibit the imposition of "chargemaster" rates to patients eligible for financial assistance. 

Find out how to use the regulations to help clients who owe medical debts to nonprofit hospitals and protect them from lawsuits, liens, and credit reporting damage. The webinar will also review the voluntary best practices on medical account resolution issued by the Healthcare Financial Management Association.

Here is the link for REGISTRATION.  Thanks to the National Senior Citizens Law Center (soon to be "officially" Justice in Aging) for sharing news of this educational opportunity of clear relevance to older persons and their families. 

February 24, 2015 in Consumer Information, Ethical Issues, Federal Cases, Federal Statutes/Regulations, Health Care/Long Term Care, Medicaid, Medicare | Permalink | TrackBack (0)

Friday, February 20, 2015

Cutting Edge in Seasoned Cooking; Not So in Hiring "Seasoned" Employees?

Seasons 22 Restaurants, with locations in more than ten states nationwide, has a reputation for dining that emphasizes farm-to-table freshness, naturally seasoned cooking, and with a pledge that nothing on the menu is over 475 calories.  Cutting edge, and hip.

Not so hip are the allegations by the EEOC that since 2010 the chain "engaged in a nationwide pattern or practice of age discrimination in hiring hourly workers," as described in a lawsuit filed by the EEOC this month:

"According to the lawsuit, various Seasons 52 management hiring officials would travel to new restaurant openings to oversee their staffing. Older, unsuccessful applicants across the nation were given varying explanations for their failure to be hired, including 'too experienced,' the restaurant's desire for a youthful image, looking for 'fresh' employees, and telling applicants that Seasons 52 'wasn't looking for old white guys.'

 

Age discrimination violates the Age Discrimination in Employment Act (ADEA). The EEOC filed suit Civil Action No. 1:15-cv-20561-JLK, in U.S. District Court for the Southern District of Florida after first attempting to reach a pre-litigation settlement through its conciliation process. The agency seeks monetary relief for applicants denied employment because of their age, the adoption of strong policies and procedures to remedy and prevent age discrimination by Seasons 52, and training on discrimination for its managers and employees.

 

'This case represents one example of the barriers to hiring that some job applicants face,' said Malcolm S. Medley, district director for the EEOC's Miami District Office. 'Eradicating barriers to employment opportunities is a priority of the Commission.'"

Thanks to students in the Elder Law class at George Washington Law for sharing news of this case, which includes the response by Darden (the parent company) spokesman, denying the allegations and pledging to "defend this claim vigorously."

February 20, 2015 in Current Affairs, Discrimination, Ethical Issues, Federal Cases, Federal Statutes/Regulations | Permalink | Comments (0) | TrackBack (0)

Wednesday, February 18, 2015

Questions Raised by Doctor's Guilty Plea for Kickbacks from Prescribing Risky Drugs to Seniors

A long-running investigation of a doctor in Illinois for Medicaid and Medicare fraud is coming to a close.  Michael Reinstein, "who for decades treated patients in Chicago nursing homes and mental health wards," has pleaded guilty to a felony charge for taking kickbacks from a pharmaceutical company.  As detailed by the Chicago Tribune, on February 13, Reinstein admitted prescribing, and thus generating public payment for, various forms of the drug clozapine, widely described as a "risky drug of last resort."

The 71-year old doctor has been the target of the state and federal prosecutors for months, and he's also agreed to pay (which is, of course, different than actually paying) more than $3.7 million in penalties.  He may still be able to reduce his prison time from 4 years to 18 months, if he "continues to assist investigators."

The investigation traces as far back as 2009, as detailed by a Chicago-Tribune/ProPublica series that revealed he had prescribed more of the antipsychotic drug in question to patients in "Medicaid's Illinois program in 2007 than all doctors in the Medicaid programs of Texas, Florida and North Carolina combined."  Further, the Tribune/ProPublica series pointed to autopsy and court records that showed that, "by 2009, at least three patients under Reinstein's care had died of clozapine intoxication." Reinstein's, and one assumes, the pharmaceutical company's, defense was that the drug could have appropriate, therapeutic effects for patients, beyond the limited "on-label" realm.

Assuming that the government ever sees a dime in repayment, from either the doctor or the drug company, my next question is what happens to that money?  At a minimum, shouldn't there be review of the effect of the drugs on these patients, some of whom may have been administered the drug for years? We keep reading that the drugs are "risky," but shouldn't there be evidence of real harm -- or perhaps even benefit -- from the documented "off-label" use?  Certainly, prosecutions for off-label drugs are understandable attempts to claw-back, or at least reduce, public expenditures. But isn't more at stake, including the search for relief or workable solutions for patients who are in distress? 

In March 2014, for example, Teva Pharmaceutical Industries Ltd., the maker of generic clozapine, reportedly agreed to pay more than $27.6 million to settle state and federal allegations that it induced Reinstein to prescribe the drug. Recovering misspent dollars is important.  But I also would like to see evidence of the harm alleged by the government -- or the benefit asserted by the defendants -- from the administration of the drugs.  Isn't objective study of the history of these real patients a very proper use of the penalties? 

February 18, 2015 in Cognitive Impairment, Consumer Information, Crimes, Dementia/Alzheimer’s, Ethical Issues, Federal Cases, Federal Statutes/Regulations, Health Care/Long Term Care, Medicaid, Medicare, State Cases | Permalink | Comments (0) | TrackBack (0)

Wednesday, February 4, 2015

Part 2 of "Death of a Black Nursing Home" - Medicaid's Racism

Part 2 of the provocative New America Media series on "Death of a Black Nursing Home," describes a pervasive, discriminatory impact by states in deciding how to use Medicaid funding for health and long-term care.  In "Why Medicaid's Racism Drove Historically Black Nursing Home Bankrupt," Wallace Roberts writes:

"About 90 percent of Lemington’s residents were Medicaid recipients. The industry’s average, however, is 60 percent, so Lemington’s mission of providing care for low-income people from the area put it at a competitive disadvantage.

Lemington’s over-reliance on Medicaid was the principal reason its debt grew from a few hundred thousand dollars in 1984, to more than $10 million, including a $5.5 million mortgage on a new facility in 1984.

Pennsylvania’s Medicaid payments for nursing home reimbursement were too low to enable the home to hire enough trained staff. Lemington’s former human resources director, Kevin Jordan, noted that the home was “always scrambling to cover payroll” and spent lots of money on 'legal fees fighting the union.'”

The article details serious mistakes made by individuals in the operation of Leimington Home for the Aged, but also points to essential problems in Medicaid funding that doomed the facility to failure.  The author calls for reforms, including a consistent, national approach to long-term care funding, to eliminate -- or at least reduce -- the potential for misallocation of money by states:

"Although the leadership of Lemington Home must bear the responsibility for those legal judgments and the fate of an important institution, the racist history imbedded in Medicaid’s rules for the past 80 years should share the brunt of the blame for bankruptcies at hundreds of long-term care homes largely serving black, latino and low-income elders.

One needed change would be to award nursing homes in African American, Hispanic and low-income neighborhoods serving large numbers of Medicaid recipients larger “disproportionate share payments.” Under the law, such homes receive additional reimbursements for serving a larger-than-usual proportion of very poverty-level residents. But the higher rate also doesn’t kick in unless a facilty has at least a 90 percent occupancy rate, which many homes like Lemington can’t easily reach. Rules relaxing that standard would bring badly needed revenue to vulnerable homes.

Congress could also require that all nursing homes accept a minimum number of Medicaid patients so as to spread the financial burden.

But to truly do the job, Medicaid should be federalized—taken out of the hands of state and local officials, many of whom use get-tough rhetoric in elections to stigmatize and punish often-deserving people...."

The full articles are interesting -- we will link to any future parts of this bold series.

February 4, 2015 in Current Affairs, Discrimination, Elder Abuse/Guardianship/Conservatorship, Ethical Issues, Federal Cases, Federal Statutes/Regulations, Health Care/Long Term Care, Housing, Medicaid, Medicare | Permalink | Comments (0) | TrackBack (0)

Tuesday, February 3, 2015

New Series Examines Impact on Minorities of "Flawed Scheme" for Funding Long-Term Care (Part 1)

This Blog has followed the complicated recent history of bankrupt Lemington Home for the Aged, in Pittsburgh, with posts here and hereNew America Media, a national association of over 3000 ethnic media organizations, has begun an important, multi-part series examining the "impoverished history of race" in long-term care for persons of color.  The Lemington Home becomes a case study.  The series is titled The Death of a Black Nursing Home.

"[W]hat happened to Lemington is not uncommon. Researchers at Brown University found that more than 600 other nursing homes in African American, Hispanic and low-income neighborhoods also went bankrupt during this period.

Their study examined the closings of more than 1,700 independent nursing homes between 1999-2009 and found that those located in largely ethnic and low-income communities were more likely to have been closed, mostly because of financial difficulties.

Specifically, nursing homes in the zip codes with the highest percentage of blacks and Latinos were more than one-third more likely to be closed, and the risk of closure in zip codes with the highest level of poverty was more than double that of those in zip codes with the lowest poverty rate."

Observing that "Medicaid homes can't compete" successfully, the article examines reimbursement rates under Medicare and Medicaid and the disproportionate effect of underfunding on minority communities. 

"The principal authors of the study, Vincent Mor and Zhanlian Feng, both of Brown at the time (Feng is now at the Research Triangle Institute), noted 'closures were more likely to occur among facilities in states providing lower Medicaid nursing home reimbursement rates.' That left these homes without the resources they needed to compete successfully in an industry experiencing an oversupply of beds and intensified competition....

 

While Medicaid reimbursement rates vary by state, they are always below Medicare’s reimbursement levels or the fees charged to people who pay for their own care.  The demise of Lemington and other nursing homes in minority and low-income neighborhoods is a direct result of this flawed payment scheme. However, large for-profit nursing home chains, some of which are owned by private equity companies and real estate investment trusts, can maximize profits by using expensive and aggressive marketing practices to cherry pick the wealthier residents in a given area while reducing the number of their own Medicaid clients.

Medicaid’s payment structure also has impacted the quality of care in nursing homes with predominantly minority residents."

We will link to the next parts of the series as they become available.

February 3, 2015 in Consumer Information, Discrimination, Ethical Issues, Federal Cases, Health Care/Long Term Care, Housing, Medicaid, Medicare | Permalink | Comments (0) | TrackBack (0)

Thursday, January 29, 2015

Third Circuit: Officers & Directors of Bankrupt Nursing Home Liable for "Deepening Insolvency" But Punitive Damages Not Proven re Directors

We reported in December 2013 about the long saga of the Lemington Home for the Aged, a troubled nursing home that sought bankruptcy court protection in 2010.  Lemington Home for Aged Now, in a 2015 decision by the Third Circuit Court of Appeals, following an appeal from the March 2013 jury verdict that awarded the Home's unsecured creditors a total of $5.75 million, key issues about that damage award are addressed.

Judge Vanaskie, who had taken the lead on an earlier appellate opinion regarding the officers and directors, provided some relief for the five former directors on the nonprofit organization's board, who faced joint and several liability for more than $3.5 million in punitive damages.  The opinion begins with a concise summary of the outcome:

"This lawsuit, which concerns the mismanagement of a Pittsburgh-area nursing home and its ensuing bankruptcy, comes before the Court for a third time on appeal. In the present appeal, the Defendants, two former Officers and fourteen former Directors of the nursing home, present several challenges to the jury's verdict, which found them liable for breach of fiduciary duties and deepening insolvency. The jury also imposed punitive damages against the two Officers and five of the Directors.

 

We will affirm the jury's liability findings and the punitive damages award imposed against the Administrator and the Chief Financial Officer of the nursing home. We will, however, vacate the jury's award of punitive damages against the Defendants who served on the nursing home's Board of Directors. We conclude that the punitive damages award against those Defendants was not supported by evidence sufficient to establish that they acted with 'malice, vindictiveness and a wholly wanton disregard of the rights of others .' Smith v. Renaut, 387 Pa. Super. 299, 564 A.2d 188, 193 (Pa. Super. Ct. 1989) (citations omitted)."

The full opinion, filed on January 26, 2015 for In re Lemington Home for the Aged, is well worth reading, especially for the additional analysis of how individual officers and directors of a corporation (even a nonprofit corporation), can face personal liability for contributing to  "deepening insolvency," a form of "fraudulent expansion of corporate debt."  At the same time, the opinion analyzes the active misconduct of the CEO and CFO of the company that supported the award of punitive damages, as opposed to the absence of proof of  "outrageous or malicious conduct" that precluded the directors' liability for same.

January 29, 2015 in Current Affairs, Ethical Issues, Federal Cases, Health Care/Long Term Care, Retirement | Permalink | Comments (0) | TrackBack (0)

Tuesday, January 27, 2015

The Importance of Checks & Balances in Law Firm Management, Including Handling Of Elder Client Funds

A news release from the U.S. Attorney's Office in Western Virginia provides an important reminder of the importance for every lawyer of having a system of checks and balances for law office management, to prevent any single employee from having unsupervised access or exclusive control over client trust funds.  On December 15, 2014, a 34-year-old legal assistant at a law firm in Virginia was sentenced to 24 months in federal prison for stealing more than $183k from an elderly client of the law firm.  The lawyer who employed that assistant had been named by the county to serve as the conservator for the elderly woman who became the victim.  According to the news release, the attorney "allowed [the legal assistant] to access the elderly woman's bank accounts,...but [the assistant] did not have signature authority on the accounts."

According to the news release, the employer "to date... has repaid $104,990.15." One suspects the law firm (or, its insurer) will have to pay the whole tab, even though the sentencing order imposes an obligation of restitution for the full sum on the legal assistant. 

January 27, 2015 in Crimes, Elder Abuse/Guardianship/Conservatorship, Estates and Trusts, Ethical Issues, Federal Cases, Legal Practice/Practice Management | Permalink | Comments (0) | TrackBack (0)

Sunday, November 30, 2014

Justice Department Reaches $437,500 Agreement with City of Ocean Springs, MS to Resolve Disability Discrimination Lawsuit

The Justice Department announced a comprehensive settlement today, resolving a federal civil rights lawsuit against the City of Ocean Springs, Mississippi, for alleged violations of the Americans with Disabilities Act (ADA). Under the proposed consent decree, the City will pay $437,500 in damages to a psychiatric treatment facility that was discriminated against by the City. The decree also requires systemic reforms to the City's land use and zoning practices to eliminate barriers for providers of mental health services to people with disabilities and combat the stigma of mental illness. The complaint, also filed in federal court today, alleges that the City discriminated against Psycamore, LLC, an outpatient psychiatric treatment facility, when it denied a certificate of occupancy and a use permit because Psycamore treats patients with mental illness.

Read the settlement agreement.

November 30, 2014 in Discrimination, Federal Cases, Federal Statutes/Regulations, Housing | Permalink | TrackBack (0)

Monday, November 24, 2014

Proposed Changes to Attorney Disciplinary Rules Follow Recent Theft Reports

Several high profile incidents, such as those reported here in our Blog and here by the Philadelphia Inquirer, involving attorneys disciplined or convicted of theft of client funds, have triggered proposed changes in Pennsylvania's Rules of Professional Conduct for attorneys. The rule changes proposed by the Pennsylvania Supreme Court's Disciplinary Board include:

  • imposing restrictions on an attorney's brokering or offering of "investment products" connected to that lawyer's provision of legal services;
  • clarifying the type of financial records that attorneys would be required to maintain and report, regarding their handling of client funds and fiduciary accounts;
  • clarifying the obligation of attorneys to cooperate with investigations in a timely fashion;
  • clarifying the obligation of suspended, disbarred, or "inactive" attorneys to cease operations and to notify clients "promptly" of the change in their professional status. 

The Disciplinary Board called for comments on the proposed rule changes, noting that although individual claims against the Pennsylvania Lawyers Fund for Client Security are confidential, "Fund personnel can attest that from time to time, the  number of claims filed against a single attorney will be in double digits and the total compensable loss will amount to millions of dollars."  The comment window closed on November 3. 2014.

In recommending changes, the Disciplinary Board noted common threads running through many of the cases, including:

Continue reading

November 24, 2014 in Crimes, Elder Abuse/Guardianship/Conservatorship, Estates and Trusts, Ethical Issues, Federal Cases, Federal Statutes/Regulations, State Cases, State Statutes/Regulations | Permalink | Comments (0) | TrackBack (0)

Monday, October 27, 2014

Debating Fiduciary Duties and Resident Rights in Continuing Care Communities

Last week I was part of a panel hosted by the National Continuing Care Residents' Association (NaCCRA) in Nashville, a component of the larger (much larger!) annual meeting of LeadingAge.  The theme for the panel was "Resident Engagement in Continuing Care Life" and for my part of the panel, I used an interesting Third Circuit bankruptcy court decision, In re Lemington Home for the Aged, to discuss whether residents of financially troubled CCRCs should be treated as entitled to enforce specific fiduciary duties owed by the CCRC owners to creditors generally, even unsecured creditors, fiduciary duties that may give rise to a direct cause of action connected to "deepening insolvency."  NaCCRA LeadingAge Meeting October 2014

Jennifer Young (pictured on the left), a CCRC resident, talked about what it is like to "be" an unsecured creditor in a CCRC's Chapter 11 bankruptcy court proceeding.  Her explanation of how creditors' committees operate in bankruptcy court (including how they hire legal counsel and how that counsel is paid out of the Debtor's estate) was both practical and illuminating.  The closing speaker on the panel was Jack Cumming (below left). Jack's has deep experience as an actuary and a CCRC resident.  He noted the disconnect between the intentions of providers and the realities faced by residents and called for stronger accountability in investment of resident fees.Jack Cumming October 2014  I always come away from my time with Jack with lots to think about. Our moderator was NaCCRA president Daniel Seeger (right), from Pennswood Village in Pennsylvania.  Dan Seeger October 2014

In my final comments, I reminded our audience that even though our panel was focusing on "problems" with certain CCRC operations, including some multi-site facilities, many (indeed most) CCRCs are on sound financial footing, especially as occupancy numbers rebound in several regions of the country.  Both panelists and audience members emphasized, however, that for CCRCs to be able to attract new residents, the responsibility of the CCRC industry must improve.  For more on these financial points, go to NaCCRA's great educational website, that includes both text and videos, here.

Interestingly, during the LeadingAge programming that began on Saturday, October 18 and continued through October 22, I was hearing a lot about a potentially major shift in the long-term housing and service market.  Some of the largest attendance was for deep-dive sessions on new service models for "Continuing Care at Home," sometimes shortened to CCAH or CCaH.  CCAH is often seen as a way for more traditional CCRCs to broaden their client base, particularly in the face of occupancy challenges that began with the financial crisis of 2008-2010.  

As a corollary of this observation about market change, one of the topics under debate within the leadership of LeadingAge is whether Continuing Care Retirement Communities need a new name, and I can see movement to adopt a name that aligns better with the larger menu of non-facility based services that many providers are seeking to offer. 

Of course, as a law professor, I wonder what these market changes mean for oversight or regulation of new models.  Not all states are keeping up with the changes in the Continuing Care industry, and name changes may complicate or obscure the most important regulatory questions.       

October 27, 2014 in Current Affairs, Ethical Issues, Federal Cases, Health Care/Long Term Care, Housing, Retirement, State Cases, State Statutes/Regulations | Permalink | Comments (0) | TrackBack (0)

Sunday, October 26, 2014

Filial Liability + Bankruptcy = Trouble

As regular readers of the Elder Law Prof Blog may recognize, I reside and work squarely in a zone where "filial support claims" are more than just theoretical propositions.  Pennsylvania continues to be Ground Zero for modern complications arising from use of a Colonial era law that permits adult children to be held liable for the cost of an indigent parent's long-term care. 

The latest example is In re Skinner, 2014 WL 5033258, decided by Bankruptcy Judge Madeline Coleman in the Eastern District of Pennsylvania on October 8, 2014.

The issue is whether one sibling can prevent another sibling from "discharging" any obligation to pay an assisted living facility for their mother's care.  Both brothers were sued by the facility, resulting in a default judgment against one brother (Thomas) for $32,225, who in turn sought discharge of that debt in bankruptcy court.  Brother William, probably facing the prospect of picking up the full tab for his defaulting brother, initiated an adversary proceeding, seeking to prevent the discharge.   The court concludes that Brother William "lacks standing" to prevent Brother Thomas' discharge of the debt to the assisted living facility.

In dismissing Brother William's claim, the Bankruptcy Judge addresses both the Uniform Fraudulent Transfer Act and Pennsylvania's filial support law.  According to the opinion, Brother William alleges that Thomas used a Power of Attorney executed by their mother in 2007, to access her bank accounts in a "scheme [with his wife] to use the Mother's assets, including her interest in long-term care benefits, to fund approximately $85,000 of their personal expenses." However, the court concludes that even accepting the truth of allegations that "suggest that the Mother was injured by the [Thomas'] conduct, that conduct was directed at the Mother and her property. The conduct was not directed at [William]."  The Bankruptcy Court also rejected any theory of "derivative standing."  

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October 26, 2014 in Current Affairs, Elder Abuse/Guardianship/Conservatorship, Ethical Issues, Federal Cases, Health Care/Long Term Care, State Statutes/Regulations | Permalink | Comments (0) | TrackBack (0)

Wednesday, October 22, 2014

The Worst Waiting List?

I've heard about the backlog for SSD appeals, but I had no idea how much of a backlog exists until I read the story in the October 19, 2014 Washington Post. Waiting on a Social Security disability appeal? Get in line — a very long line brings a new perspective on waiting lists.  The story reports that there are  990,399 (you read that right, 990,399)  SSD appeals waiting for ALJ hearings.  We have been hearing a lot about the backlog with the VA (526,000 according to the story) so why haven't we heard about the SSDI case backlog?   Want to know how long it takes for a backlog of almost one million cases to occur? According to the Post story, the backlog has been going on since President Ford's administration, but a significant increase occurred between 2008-20014.  Why did this occur?  "[T]he system became, in effect, too big to fix: Reforms were hugely expensive and so logistically complicated that they often stalled, unfinished. What’s left now is an office that costs taxpayers billions and still forces applicants to wait more than a year — often, without a paycheck — before delivering an answer about their benefits." As well, factor in the "Great Recession" and Boomers.  The article also mentions budget cuts to SSA as well as the government shutdown in 2013.

A sad irony-the story quotes one of the ALJs in S. Florida who had 2 claimants die before their appeals were heard, but the ALJ still had to hear the case of one, because if the decedent were determined to have been disabled, then the decedent's surviving child might receive benefits.

Although SSD waiting lists outnumber both VA and Patents, according to the story, the  wait time to decision is shorter than that for the VA and Patent office.  The SSA ALJs "are the moral centerpiece of this system: a symbol that the government intends to apply the old American ideal of due process before the law to the vast new caseloads of the American welfare state. They are also the system’s biggest problem — a 40-year-old clog in the pipe." A law prof at GW, Richard Pierce, takes the position "that the government should eliminate the judges altogether and just let the bureaucrats with the paperwork decide. [Professor Pierce] said that the main thing these hearings bring to the process — that face-to-face interaction between judges and applicants — often adds only pathos, not useful information."

A push to shrink the backload resulted in a drop of both cases and wait time in 2010 but a review of the decisions noted an uptick in the award of benefits.  It would seem, from reading this article, that part of the problem is outdated requirements and resources available to the judges (or lack thereof).  SSA has lessened the pressure on the ALJs to some extent, so now the ALJs are  "limited ... to 720 cases a year and [SSA] imposed new checks to make sure the “yes” decisions are as well thought-out as the 'noes.'"  The uptick in benefits awards has dropped, with the award of benefits at 44%.  Despite the fact that SSSA has hired more ALJs, the backlog is pushing one million. The Post reports that there were an additional 13,000 added in the first two weeks of October!  The story concludes by noting that the backlog isn't limited to just the ALJs.  The Appeals Council also has a backlog: "There are 150,383 people waiting for an Appeals Council decision. The average wait there is 374 days."

October 22, 2014 in Current Affairs, Federal Cases, Federal Statutes/Regulations, Social Security | Permalink | Comments (0) | TrackBack (0)

Thursday, September 11, 2014

Fed Court in NY Takes Hard Line on Effect of "Partial Cure" for Medicaid Ineligibilty

Judge Geraci of the U.S. District Court, Western District of New York, is the latest judge to address an important topic in Elder Law regarding eligibility for long-term care benefits under Medicaid.  The court defines the issue as follows:  "When an uncompensated transfer of assets has been made and a [Medicaid] penalty period imposed, how does a partial return of the transferred funds affect the beginning of the penalty period?"  

In its August 2014 decision in Aplin v. McCrossen, the court addresses summary judgment motions in two separate cases that were filed on behalf of 80-year-old Florence Aplin and 85-year old Sergio Ciardi, both residents of nursing homes.  In one case, for example, the Aplin case, the transfers totaled approximately $450,000; however, approximately $76,000 was later returned by the donees. The hope of the plaintiffs was that "return" of the money would permit them to shorten their penalty periods tied to the original transfers.  This approach, when planned in advance, is a post-Deficit Reduction Act technique sometimes known in Elder Law circles as a "partial cure" (as part of "reverse half-a-loaf" gifting).

Judge Geraci denied the relief sought by the plaintiffs.  He followed the hardline approach of "nonprecedential" rulings on New Jersey disputes about partial cures, ruling that "return" of money permits the state agency to recalculate the start of the penalty period. The court decided that NY administrative rules do not conflict with federal policy and not only permit but require the state agency to, in effect, restart the penalty period on the ground that the later date is when the "applicant becomes otherwise eligible for Medicaid." This phrase is a key concept in federal Medicaid law.  The plaintiffs had argued that phrase applied only to an earlier date, from their original application. Judge Geraci concluded:

"I find no circumstances in this case which indicated that Defendants' interpretation and application of the provisions of [New York administrative directives] contravene Congress' articulated purpose in enacting the Medicaid Act -- to provide medical care, services and supplies for the financially needy.  Essentially, the assessment of an applicant's income and resources which results in a determination that such applicant has transferred resources for less than fair market value during the statutory look-back period and that an appropriate penalty period must be imposed, ensures that the applicant has not falsely impoverished himself or herself in order to qualify for medical assistance at public expenses which, by law, is undeserved."

While it is apparent that the New York federal judge was not eager to give applicants any benefit tied to partial cures on transfers, the decision also appears to approve or at least ignore what some would describe as a "perverse effect" of the New York policy.  By imposing a new, later "start date" for the ineligibility period following the return, New York can actually impose a penalty that is longer than the original penalty period for the full transfer. 

Also at issue in the case was the effect of a series of statements on the federal government's side, including the so-called "McGreal Letter" from CMS that was relied on by the plaintiffs in making the returns. (The court did not expressly address a May 2014 GAO study, where it was reported at page 28 that "[a]ccording to CMS, states can choose whether or not to consider a partial return of transferred assets on Medicaid planning.")

Should there be uniformity among the states, not just on whether but how families can seek any relief from "resource" limits set by federal law?  (The GAO study linked above indicates a range of different state-specific options are in play.) The answer to that question may depend on one's point of view.

For more background on the complex interaction between Medicaid applications, ineligibility periods triggered by uncompensated transfers, partial cure attempts and penalty start dates, see ElderLawGuy Jeff Marshall's blog post from 2011.    

September 11, 2014 in Federal Cases, Federal Statutes/Regulations, Health Care/Long Term Care, Medicaid | Permalink | Comments (0) | TrackBack (0)